Canada: Sectoral Agreements with the US 'Unlikely' Before USMCA Review

Ottawa – Canadian Prime Minister Mark Carney mentioned that reaching quick sectoral agreements with the United States to lower tariffs, particularly on steel and aluminum, has become unlikely, suggesting that these issues may be deferred to the upcoming review of the United States-Mexico-Canada Agreement (USMCA) scheduled for next year.

Carney noted that previous talks were nearing an agreement on tariffs for metals before Washington suspended negotiations last October, freezing the current sectoral path.

He added that Canada still considers its proposed terms as valid; however, the US has 'not returned to the negotiating table' yet. Carney indicated that the tight timeline and the approaching USMCA review make integrating sectoral negotiations into the comprehensive review the most likely option, while also confirming Ottawa's readiness to reopen discussions if the US desires.

Regarding forestry products, Carney affirmed Canada's willingness to reach an agreement amid the US imposing tariffs and taxes approaching 45% on Canadian softwood lumber imports, which raises concerns for the US construction sector. He emphasized Canada's commitment to its dairy import management system, a recurring contentious issue in bilateral trade relations.

Carney also mentioned that leaders from Canada, the US, and Mexico outlined the framework for the USMCA review during side meetings in early December, paving the way for broader negotiations in 2026.